Gold prices held steady on Monday as traders looked ahead to a heavy flow of U.S. economic data expected this week. Market sentiment remained focused on the possibility of a Federal Reserve interest rate cut in December.
At 08:10 ET (13:10 GMT), spot gold was up 0.3% at $4,077.75 per ounce. December gold futures, however, slipped 0.1% to $4,113.50 per ounce.
A rebound in equities and other risk-sensitive assets reduced demand for gold. Reports that the United States was working on a potential Russia-Ukraine ceasefire also weighed on safe-haven flows.
Still, ongoing concerns about global fiscal stability and diplomatic tensions between China and Japan kept gold comfortably above the $4,000 mark. Expectations for multiple U.S. economic releases this week also helped limit downside pressure, alongside growing anticipation of lower interest rates in the near term.
Gold Slips as Rate Cut Bets Strengthen
Expectations for a December rate cut increased sharply after New York Fed Governor John Williams said on Friday that the central bank still had sufficient reason to ease policy next month. Williams pointed to possible weakness in the labor market and gave reassurance that inflation risks had moderated.
Traders priced in a 67.3% probability of a 25-basis-point cut at the Fed’s December 9–10 meeting, up from 39.8% just a week earlier, according to the CME FedWatch Tool.
Other precious metals gained on Monday. Spot platinum rose 1.7% to $1,550.45 per ounce, while spot silver edged higher to $49.925 per ounce. The broader expectation of falling U.S. interest rates helped limit gold’s overall retreat.
Heavy U.S. Data Week Ahead
Markets are now focused on several key U.S. data releases for September that were delayed by the recent government shutdown. These figures are expected to provide fresh insight into the state of the economy heading into December.
Industrial production and capacity utilization arrive on Monday. Producer price index and retail sales data follow on Tuesday. Building permits, durable goods orders, weekly jobless claims, and most importantly, third-quarter GDP figures are scheduled for Wednesday.
The Fed’s preferred inflation measure—the PCE price index—is also due on Wednesday. While these releases will help clarify recent economic trends, the lack of official October data still leaves policymakers with limited visibility ahead of their final meeting of the year.
The Federal Reserve has recently shown signs of division over whether further rate cuts are necessary in 2024, contributing to earlier expectations for a policy pause.
Bank of America: Gold Could Reach $5,000 Next Year
Despite last week’s pullback, Bank of America maintains a bullish long-term outlook. The bank expects gold to extend its strong performance into 2026, supported by the same macroeconomic factors that pushed prices higher through 2025.
In its “Year Ahead” outlook, BofA notes that gold has repeatedly reached new record highs. Although technically overbought, the metal remains “underinvested,” which analysts say leaves room for continued gains.
Michael Widmer and his team argue that the unconventional U.S. economic policies that drove bullion higher this year are still in place. As long as these conditions persist, the bank sees a realistic path for gold to reach $5,000 per ounce in 2026. The main risk to this outlook would be a stronger-than-expected hawkish shift from the Federal Reserve.
